This lender offers low down payment loans — but customer reviews are negative.
As one of the largest banks in the US, Bank of America offers competitive mortgage rates and multiple loans — including a loan where you can put down as little as 3%. But its size can cause customer service hiccups.
|Name||Bank of America Mortgage|
|Loan types||Purchase, Refinance, Home Equity|
|Minimum down payment||5%|
Expect fees to include appraisal fees, title charges, closing fees and state taxes.
Ask your loan consultant for the specific fees associated with your pending loan, and keep an eye out for additional fees in your loan documentation.
It falls short in the customer service department, though. The BBB recorded 5,821 complaints in the last three years, and Bank of America has earned a one-star rating from 239 customer reviews. It’s a similar story on TrustPilot, where the bank has a two-star rating based on 44 reviews.
While customers praised the savvy online experience and diversity of mortgage products, many were frustrated with the service they received.
It’s worth noting that these consumer reviews are for Bank of America as a whole — and not for its mortgages specifically.
What types of loans does Bank of America offer?
Bank of America offers several mortgage types, including:
Bank of America offers fixed-rate conventional mortgages with terms between 15 and 30 years. It also offers adjustable-rate mortgages with 10/1, 7/1 and 5/1 ARMS.
Designed for borrowers with low to moderate income, FHA loans are available with as little as 3.5% down to homebuyers who meet certain income requirements set out by the federal government.
VA loans are available with $0 down to qualifying military service members, veterans and certain military spouses.
A mortgage is considered jumbo if it’s too big to be bought out by Fannie Mae and Freddie Mac — which is most loans over $484,350 as of 2019. Bank of America offers jumbo loans of up to $2.5 million.
Other loan types
- Refinance mortgage. If you currently have a mortgage and want to refinance it to get a better interest rate or different loan term, Bank of America can help.
- Home equity loan. A home equity loan allows you to borrow a lump sum against the value of your home.
- HELOC. A home equity line of credit (HELOC) allows you to draw from the value of your home as needed, sort of like a credit card.
- Affordable Loan Solution mortgage. Bank of America’s Affordable Loan Solution is available for as little is 3% down with no mortgage insurance to homebuyers who meet the income requirements.
Bank of America feesBank of America says nothing about its fees online, but you can expect to cough up these closing costs:
- Appraisal fee
- Credit report fee
- Title insurance fee
- Recording fee
- Inspection fee
- Origination fee
These fees can be hefty. If you’re a Preferred Rewards customer, you may qualify for a $200 to $600 discount on your origination fee. This is based on your account balance at the time of application and your Preferred Rewards tier (Gold, Platinum or Platinum Honors).
To qualify for a mortgage with Bank of America, you’ll need a minimum credit score of 620,or 600 for FHA loans, and a maximum debt-to-income ratio of 43%.
The down payment depends on the loan type, but you can put down as little as 3% through the Affordable Loan Solution program.
You’ll need to provide:
- Pay stubs from the past 30 days
- W-2s for the past two years
- Bank statements for all financial accounts, including investments, for the past two months
- Tax returns
- A copy of the signed purchase and sales agreement
- A profit/loss statement for the most recent quarter or year to date if you’re self-employed
How to get a home loan with Bank of America
You can apply for a mortgage in person, over the phone or online through The Bank of America Digital Mortgage Experience. The application takes around 30 minutes to complete.
To apply online:
- Head to the Bank of America website. Hover over Home Loans, and press Mortgages.
- Click Get Started.
- You’ll be asked if you want to Buy a Home or Refinance Your Existing Home. For this example, let’s say you’re buying. Click Continue.
- Indicate whether you’re under contact for a property, or hoping to prequalify.
- Sign In if you’re a customer. Otherwise, click Continue.
- Enter your Personal, Contact and Citizenship details.
- Add your coapplicant’s information, if you have one.
- Type in the details about your new home, including the Address, Type of Property, Property Use (e.g. primary residence or vacation home), and Requested Closing Date.
- Outline your Assets, Income and Employment.
- Upload identifying and supporting documents.
- Submit your mortgage application. You’ll receive a Loan Estimate within three business days.
Pros and cons
- Accessibility. Bank of America originates loans and has branches in all 50 states. If there’s no loan officer available at your branch, the bank has in-house video conferencing.
- Low interest rates. Comparatively, Bank of America charges lower rates on the most popular mortgage products. You can get a custom rate online, too.
- Alternative credit data. For some loans, the lender will accept rent and utility statements.
- Discounts for existing clients. Preferred Rewards clients may qualify for a $200 to $600 discount on their origination fees.
- High volume of consumer complaints. Most of the complaints online point to customer service issues.
- Less personalized approach. Bank of America has thousands of branches across the country, which makes it convenient but means you may not get the same level of customized care.
- Limited coverage in the Midwest. Its physical presence is concentrated along the East and West Coast.
- History of irresponsible mortgage lending. The bank has been fined for financial fraud in the past.
What is Bank of America?
Bank of America is one of the country’s four biggest banks, offering mortgage products along with banking and investing accounts.
But it’s been involved in a number of scandals. In 2014, the bank was fined over $16 billion by the Justice Department for financial fraud, in large part because of how it handled mortgages. At the time, it was the largest settlement with a company in American history.
In a separate case, Bank of America was fined $1.27 billion for mortgage fraud, but the charge was thrown away after the bank appealed the ruling.
And in 2017, a judge fined Bank of America $45 million for it’s “heartless” treatment after it improperly foreclosed on a couple’s home and evicted them with only three days’ notice.